More jobs cuts coming at Mondelez amid restructuring

Mondelez International Inc.'s latest push to reinvent itself as a nimble company focused on snacks is likely to lead to more job cuts, Chief Executive Irene Rosenfeld said on Wednesday.

Mondelez, known for foods such as Oreo cookies, announced a $3.5 billion restructuring plan on Wednesday. It is the company’s first major restructuring as a standalone company but is just the latest overhaul for the business, which went through a big restructuring about a decade ago when it was part of Kraft.

“There’s no question that there will be likely fewer roles in our organization in the future but we’re in the very early days now so I really have no further specifics to share at this point,” Rosenfeld said in an interview.

Mondelez needs an overhaul now, especially as growth in the global snacks market it focuses on has slowed. The Deerfield-based company had about 107,000 employees at the end of 2013, down 3,000 from a year earlier.

Shares of Mondelez were up 7.5 percent at $37.86 in afternoon trading on Nasdaq.

Along with the new restructuring plan, Mondelez on Wednesday announced that it plans to push its $3.9 billion coffee business into a new company next year. It will retain a 49 percent stake in the coffee-focused company, to be known as Jacobs Douwe Egberts. Jacobs will be led by executives from D.E Master Blenders 1753, the international coffee company that used to be part of Sara Lee.

That deal was in planning stages for months, according to both parties. Rosenfeld said she and the Mondelez board starting throwing around the idea last summer, well before activist investor Nelson Peltz got a seat on its board in January. Peltz, the CEO of Trian Fund Management, had long been pushing for better performance from Mondelez. Trian is one of the company’s largest shareholders.

In October 2012, the company formerly known as Kraft Foods Inc. split into two companies: Mondelez International Inc. and Kraft Foods Group Inc. Rosenfeld, who had been the chairman and CEO of Kraft Foods before the split, became the top executive at Mondelez.

Since the split, Mondelez has been taking some steps to cut costs and get into better positions for growth in emerging markets such as India. However, growth has cooled off a bit in many emerging markets and in the global snacks business in general.

Historically, the categories Mondelez is part of have grown at rates of around 6 percent. Last year, revenue at Mondelez grew 3.9 percent, excluding factors such as acquisitions, divestitures and foreign currency rate fluctuations. This year, Mondelez expects global snack growth of just 3 percent and expects its sales to be in line with that growth.

Now, the company is embarking on a $3.5 billion restructuring plan, the largest since the company then known as Kraft finished a five-year, $3.1 billion restructuring in 2008. Under that program, Kraft eliminated about 19,000 jobs, closed 36 facilities and took $3.1 billion in pre-tax charges.

With the restructuring, Mondelez aims to squeeze $1.5 billion out of its annual cost base by 2018.

Mondelez cut 3,000 jobs last year as it started to shut down some plants and cut costs in areas such as procurement, customer service and logistics. It also cut another 1,000 jobs held by contractors in 2013.